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Federal Government Provides Incentives for Replacing US States' Gasoline Tax With GPS/Distance Tax

by John Laumer, Philadelphia on 03.28.06
Cars & Transportation

tspic3.jpg.

Realizing that proposals to increase the gasoline tax would be as popular as...well, as popular as raising the gasoline tax, the US States of Oregon, Washington, and possibly California, are experimenting with GPS tracking systems that will allow them to substitute a mileage-based tax for the common gasoline volume-based tax. Apparently, the US-Department of Transportation is providing grant support for these experimental approaches, seemingly based on the notion that it will help reduce road maintenance costs and regain lost tax revenues.

Worried about losing highway funds because consumers are buying more efficient vehicles, the States are experimenting with a "...global positioning system to track miles driven, using a black box to calculate how many miles are clocked in-state, out of state and during rush hour". Require car owners to install the GPS systems, and the states could make up for tax revenues 'lost to more efficient transportation'. Now we get it. By eliminating the gas tax, they'd be budget heroes, and keep the roads repaired! But more than that is on the table.

If the system were fully implemented, the government would: have the theoretical ability for instantaneous speed monitoring (just a court order away); a prospective knowledge of who went where when and how they got there (awaiting a subpoena); have reduced some of the new incentives to own a high mileage vehicle; and, discriminated against people who, by virtue of living out in the countryside, have a long drive to get supplies or commute to work. Meanwhile, people are in denial over Peak Oil and geopolitical instability rapidly driving up fuel prices and eventually raising state gas tax revenues (it's a percentage based levy).

As a rule of thumb, the larger the vehicle, the worse the mileage, and the greater the force exerted on the roads. Therefore, big vehicles emit more pollutants and cause more road wear, requiring greater expenditure of highway maintenance funds and increased health care budgets. What a straight distance-taxing proposal would do is off-load some of the responsibility for paying for pollution and highway repair from trucks and SUV's, putting it on the small car owner, or the hybrid vehicle owner.

It would be a form of social engineering that might force people to live in denser communities over the long term. Not all bad from a TreeHugger point of view. Also on the good side, whoever gets the contract to install the millions of tracking devices and the software is going to be very happy.

On the bad side: it's a virtual toll booth that would follow you around wherever you go. And, obviously, if the metric were purely distance, it would do little, on average, to conserve oil and mitigate climate change.

Like the bricks and mortar toll booth, it's the sort of solution that politicians choose when they lack the courage to up the gas tax. There is a way, calling for some courage, however, to counter many of the drawbacks of a straight mileage based levy. States taxing authorities could weight the miles traveled with multipliers for vehicle mass and efficiency, or even for time of day. That'd restore some balance toward reducing congestion, and encouraging fuel conservation and climate protection; but, it might also make the next Election Day a transformative experience for the "heroes".

As close observers of alternative transportation, we doubt that that States' gas tax revenues are falling primarily from increased mass transit use, walking, bicycling, and hybrid car driving. Although we wish the supposition were true, the principal cause is probably that people are driving less in response to high fuel prices. And, if it were true that more efficient transportation was the main cause of falling state tax revenues, what is next? A GPS on every bike?

Lest there be any uncertainty: this is not an April Fools story.

Thanks to Andrew Krause for the tip

Comments (19)

The Gov't tracking my car with GPS? No thanks Big Brother.

jump to top T-rizzle says:

If you use toll roads that have electronic toll booths they're already tracking you even if your not using the electronic pass. I believe that they take a picture of the license plate of every car that drives through the toll booth whether you use the electronic pass or pay cash to catch toll cheaters.

Some states are mailing out tickets if you get to the next toll booth too quickly; they can calculate that you must have exceeded the speed limit in getting there that fast.

jump to top Mike says:

this has been discussed on one of the forums i frequent, thecarlounge.net as i am a car junkie at heart and it boils down to punishing the people who drive gas efficient cars since they have the luxury of not being hammered at the pump, they may be willing to take that extra trip they otherwise wouldn't have had the money for. just another way to get our money.

jump to top Joe says:

Not only is this "Big Brother" Scary, but over 80% of road damage is caused by heavy haulers (i.e. 18 wheelers) not Joe Schmo, even if Joe is driving his 4 wheeling SUV down the road.

jump to top Lil' Hugger says:

This idea has been out there for awhile now, and is among one of the worst I've ever seen.

First of all, state (and federal) gas tax revenues fall because they are almost always set dollar amounts, so as inflation continues, they get less money. This problem is easily solved by making it an inflation-indexed tax.

Blaming it on hybrids (which is a joke), then using some Orwellian mechanism of enforcement which penalizes fuel efficiency (ie, shifts the costs from large consumers to smaller consumers) is flat out stupid.

This is what happens when tax-allergic rhetoric makes people hostile towards looking at paying for what things cost, then the government comes to rely heavily on revenue streams that involve wastefulness (like fuel inefficiency) or things that harm people directly (like cigarette smoking, playing the lottery, etc).

jump to top Joseph Willemssen [TypeKey Profile Page] says:

This is a horrable idea, if you want more money for road repairs I say:
A.Increase fuel taxes. I'm a "car guy" but I see reality. Increasing fuel taxes would cause people to buy more fuel efficent vehicles.
B. Increase vehicle registration fees and base it on vehicle weight.

This should give them the dollars they need and reward those that choose a fuel efficent vehicle.

As has been said GPS tracking systems smack of Big Brother and would also be costly. For the first few years they would be paying for the systems themselves unless this is also to be passed directly to the consume thus making vehicles more costly. Either way it sounds like everyone getting screwed except for company(s) that get the production and instillation contracts.


jump to top Tim Russell says:

The big motivation for this, over the long term, isn't necessarily to punish people who buy more fuel efficent vehicles, but to deal with the inevitable transition to a variety of alternative fuels. As long as almost everyone uses gasoline, it's relatively easy to collect highway user fees by taxing gasoline. How do you fairly apportion the cost of building and maintaining highways when you have some people using hydrogen, some biodisel, some ethanol, some natural gas, some electric, and some using gasoline?
==== author's response follows ====
Good point. Not sure that the various states are as thoughtful about todays budget issues as this implies but ultimately a revenue generation that is equitable will be needed. Why the mileage rates have to be gathered in "real time" is beyond me. An annual odometer reading would suffice...perhaps when sticker inpection is due anyway.

jump to top Chris says:

Ok shall we say tax "motor fuel" that way all motorvehicle users pay.

Oops, what about pure electrics, not sure on those.

jump to top Tim Russell says:

"How do you fairly apportion the cost of building and maintaining highways when you have some people using hydrogen, some biodisel, some ethanol, some natural gas, some electric, and some using gasoline?"

Most people will continue to buy their fuel at commercial stations for the foreseeable future. You tax the fuels however you tax the fuels, just like you do now.

If for some reason people are fueling with natural gas, electricity, or hydrogen from home, you just tax them on their utility bill.

We already do all this. Not a problem. These objections to fuel efficiency and alternative fuels are red herrings put forth by people who wish to punish moves away from oil dependency.

jump to top Joseph Willemssen [TypeKey Profile Page] says:

And to clarify, Chris, I didn't mean you're pushing a red herring. I meant that the people who originated these notions are.

jump to top Joseph Willemssen [TypeKey Profile Page] says:

They could do it by amount of pollutants released. Since in CA you have to get the car smogged every 2 years and they record the odometer reading, you could estimate the amount of pollution the car has produced in that time. If you taxed on this, it would encourage people toward efficient, less polluting cars. It would also probably encourage gross polluters to get cleaner cars.

jump to top Drew says:

Ya really, if the state wants money, all they have to do is check your odometer when you get it inspected and tax you based on vehicle weight and emissions. No need for all this expensive and invasive tracking equipment.

Sure this idea might be innocent at first, until it falls into the hand of the wrong people. Citizen shouldn't have to feel like they are having their every move tracked my some system. That's not the kind of ideals America was built on.

jump to top T-rizzle says:

Using GPS under the auspices of "tracking mileage" is one of the biggest lies I've ever heard. If they wanted to tax mileage on the roads, they would just have a look at your odometer at registration time. Can't get any simpler than that!

If they want to tax the heaviest polluters/road damage vehicles, they'll need to base it on emissions tests and vehicle weight.

There's absolutely no reason why they should be tracking anyone via GPS unless they're on parole or they're fleeing law enforcement.

-Riskable
http://riskable.com

jump to top Riskable [TypeKey Profile Page] says:

Agree with all the comments here...this seems asinine!

If it's for road repair, nail the big guys, the 18 wheelers, not the little smartCar that's putting along. The notion they do an equivalent amount of damage to the road (and thus should pay the exact same mileage fee) is stupid.

Glad we have stupid and lazy politicians up here in Canada as opposed to actively evil ones :) [my guess for why they don't nail big trucks harder than the little guy...they don't want to scare business off. Easier to nail Joe Q Public; he'll whine but do nothing in the end...]

jump to top OverMatt [TypeKey Profile Page] says:

"Why the mileage rates have to be gathered in "real time" is beyond me. An annual odometer reading would suffice...perhaps when sticker inpection is due anyway."

This brings up a problem that's common to both odometer and GPS based systems, fraud. We've already got problems with odometer fraud on used/leased vehicles, and an odometer based system would just make this worse. GPS has a similar problem. I'm sure that if a state actually implemented this, there would immeaditely be people selling GPS jammers to allow you to spoof the system. Tinfoil hats for cars, perhaps?

Experience with DRM software and stored value credit cards have repeatedly proven that it's almost impossible to secure a device against its owner. Any kind of onboard system is an invitation to fraud.

From this perspective, some sort of electronic toll collection (ETC) makes a lot more sense, because the important parts of the system are on the road, rather than in people's vehicles. This has both good and bad points. One one hand, its a lot less invasive than GPS, since the cost of ETC scanners probably means that minor roads and individual neighberhoods won't be wired. On the other hand, it means the data would already be in the government's hands, so they wouldn't even need a subpoena to access it.

"Most people will continue to buy their fuel at commercial stations for the foreseeable future. You tax the fuels however you tax the fuels, just like you do now."

I think you may be missing the point I'm trying to make here. Right now, gasoline isn't taxed per dollar, it's taxed per gallon (you pay the same amout of tax whether the gallon you buy is $2 or $3). That might work for biodiesel or ethanol, but if you were to tax gaseous fuels (hydrogen and natural gas) the same as a comparable volume of gasoline, you run into all sorts of issues. Do you tax based on their volume as a gas or a supercooled liquid? If gas, at what pressure? If liquid at what temperature?

Someone suggested taxing based on pollution, but how do you measure that? If you measure it at the tailpipe, hydrogen users would pay nothing, because their only emission is water vapor. However, producing hydrogen can produce pollution (if it's generated by steam reforming or electrolysis using electricity from a source that pollutes) so logically, you should include the pollution involved in its production. But by that standard, you should tax gasoline based on refinery pollution as well. Of course, electricity opens up a whole can of worms. Do you tax electricity made by a coal burning power plant more than electricity from a nuclear plant?

"If for some reason people are fueling with natural gas, electricity, or hydrogen from home, you just tax them on their utility bill."

This poses other problems. If we tax tax all natural gas and electricity, someone who doesn't even own a car will end up paying for highways they don't use. If we set up a seperate system (maybe a seperate set of meters for car chargers/fueling) that we tax at a higher rate, there's a big incentive to sneak an extension cord/gas line out from your home use system to your car (we already have this problem with people using home heating oil in disel vehicles to avoid fuel taxes, but it's going to get a lot worse if electric/natural gas vehicles become widesperad).

"These objections to fuel efficiency and alternative fuels are red herrings put forth by people who wish to punish moves away from oil dependency."

Actually, a lot of the people thinking alternative ways to collect highway user fees would like to see higher gas taxes (and higher user fees in general, whether they are assesed through fuel taxes, tollbooths, or GPS), both because we're underfunding our transportation infrastructure and because we have serious capacity issues on our urban road networks. While I'm not really comfortable with being tracked via GPS everywhere I go, I think that whatever the future holds it's probably going to involve either some sort of GPS or electronic toll collection, simply because we need some sort of congestion pricing.

Regardless, our method of transportation financing is going to have to change, one way or the other. The days of gasoline as the universal fuel and gas taxes as the universal funding method are numbered.

jump to top Chris says:

Great comments. I am getting the impression from them, however, that I was unclear about a major point in my post. Politicians have levied a road tax at the pump for two reasons. One is that it reflected use of the public resource (highways). Reason two is that because it gets taken a little bit at the time most of us put up with it - unless there is big increase proposed it goes largely unnoticed,

The alternative is to meet more of the needs with an annual or quarterly wheel tax which is rated based upon the projected highway construction and maintenance needs. That would be democracy in action. Either we want the roads or we don't. What better way to confront the question.

Although tax fraud of all sorts is a common problem, we continue amble on as a nation. Somehow I think there are ways to work through the vulnerabilities of far simpler systems than real-time based GPS ones.

jump to top JL says:

What Oregon is doing is quite possibly the worst thing they could. The are directly challenging the one common benefit everyone sees in getting a more fuel efficient vehicle: lower operational cost. The really big joke is that fuel efficient vehicles are usually lighter vehicles, and lighter vehicles don't cause as much road wear. Someone mentioned that this would be a more democratic approach. If the purpose of fuel taxes are to pay for roadway construction and maintenance, then the more democratic thing to do is only tax me for the portion of the public resource I use (or damage).

"I think you may be missing the point I'm trying to make here. Right now, gasoline isn't taxed per dollar, it's taxed per gallon (you pay the same amout of tax whether the gallon you buy is $2 or $3). That might work for biodiesel or ethanol, but if you were to tax gaseous fuels (hydrogen and natural gas) the same as a comparable volume of gasoline, you run into all sorts of issues. Do you tax based on their volume as a gas or a supercooled liquid? If gas, at what pressure? If liquid at what temperature?"

It seems like a detail which can be figured out based upon knowing MPG equivalents and how the government wishes to tax.

"This poses other problems. If we tax tax all natural gas and electricity, someone who doesn't even own a car will end up paying for highways they don't use"

Also not a big problem. You tax at the outlet of charging or refueling, and you catch fraud just like we catch pot growers - by seeing how consumption may differ from baseline consumption prior to having a vehicle to recharge or fuel.

Again, all of this seems like pointless speculation, since the vast, vast majority of vehicles on the road right now use gasoline or diesel, so anything outside of that is accounted for by government incentive (like electric vehicles). If and when alternative fuels make serious inroads, governments can meet and change the laws whenever they want based upon the changing landscape.

None of this is relevant to the present moment of supposed shortfalls in revenue. If that's the case, the government entity should, as I suggested, change the amount of the tax, and if they're smart, index it to inflation and adjust it annually if vehicles start getting much more efficient.

The beauty, form a government perspective, of a gas tax is that it's embedded into the price rather invisibly. Ask the average person how much they're paying in taxes while fueling, I'm guessing very few know. So the minor adjustments to the rate would be imperceptible, particularly now that we're seeing much wider price fluctuations day to day than we did in the past.

Unfortunately, the mere proposal of raising gas taxes is difficult, since most entities have been too cowardly to make the adjustments when gas was cheap. Trying it when it hits $3 again is going to make them look really bad. They've conditioned people into believing in the perpetual free lunch, as taxes get made more and more invisible (as "user fees" etc).

jump to top Joseph Willemssen [TypeKey Profile Page] says:

"That might work for biodiesel or ethanol, but if you were to tax gaseous fuels (hydrogen and natural gas) the same as a comparable volume of gasoline, you run into all sorts of issues. Do you tax based on their volume as a gas or a supercooled liquid? If gas, at what pressure? If liquid at what temperature?"

The simple answer to that is to remember high school chemistry, and a little thing known as the ideal gas law. Since we know 1 mol of any gas occupies 22.5 L at standard temperature and pressure (not withstanding a small coefficient to account for molecular forces), then figuring out a per-liter comparison to gasoline is easy enough.

The real question (yes, I'm beating this horse) is one of fairness. The whole idea of fuel taxes is jacked up anyway. If States are worried about roadway upkeep, they should tax vehicles according to the odometer readings and vehicle weight. Heavier vehicles, driven further, are more responsible for road wear than lighter vehicles driven less.

Fuel taxes, by contrast, ought to be based on harmful emissions like NOx, SOx, Pb, Hg, and so on. The environment is a public resource, and its consumption ought to be accounted for. By taxing the type of emissions each fuel is responsible for, it'll promote the use of cleaner blends of gasoline, and encourage people to switch to cleaner (and preferrably carbon neutral) fuels.

The whole GPS thing smacks of big brother. And in the shady realm of politics, anytime you hear about politicians wanting to increase fuel taxes to pay for highway projects, what they really mean to say is "we're spending all the highway money on other pork projects unrelated to transportation, and we need to hide the shortfall in our general fund somehow."

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